By Paulo Trevisani
--Corn for December delivery fell 1.5% to $3.30 and 3/4 a bushel on the Chicago Board of Trade on Tuesday, as favorable weather forecasts and excellent crop conditions stoke fears of an oversupply while global demand remains subdued.
--Wheat for September delivery rose 1.1% to $5.27 and 3/4 a bushel.
--Soybeans for November delivery fell 0.8% to $8.93 a bushel.
HIGHLIGHTS
Looking For Chinese Buyers: A mix of strong yield prospects and a halt in Chinese buying weighed down corn prices, extending this week's losses. The USDA's weekly data on Monday confirmed expectations of an excellent crop, while exports to China, which boosted prices last week, didn't happen. "New Chinese demand (is) unlikely until early fall," said Tomm Pfitzenmaier from Summit Commodity Brokerage. Rains across the corn belt are also helping crops, feeding worries of an oversupply. Moreover, Mr. Pfitzenmaier said, South American producers are wrapping up an above-average crop they are selling at a price advantage to Asia.
Wheat Power: Wheat strengthened as traders struggled to figure out how big the world's supply is getting. "We're still dancing around on what is the real yield in North America," U.S. Commodities' Don Roose told WSJ. Today's price increase follows a 2.4% fall on Monday amid concerns over slow demand. Mr. Roose said those fears remain in place, despite better-than-expected reopening of tourism in the Middle East and North Africa. The broker said, however, that more important for prices today were traders reassessing their short positions.
INSIGHT
Grainy Picture: Soybeans fell in the absence of new buying from China, but Mike Seery from Seery Futures said he expects China to resume importing, providing a floor for futures despite the prospect of "excellent crops." Corn, on the other hand, is "limited to the downside" as demand remains subdued amid strong yields and favorable weather. Wheat is the positive story, as crops in Russia and Europe disappoint, Mr. Seery said. Grains in general will do better as Covid-19 loses steam. "The weak demand for commodities is starting to erode," he said.
Corn Rally Would Need Reason: Weather will continue to drive grain prices, AgResource says, noting that an updated EU model forecasts "normal precip and slightly above normal Central US temps throughout the next 30 days." The favorable weather weakens prices, as there seems to be little demand for the resulting strong crops. "The need to find corn demand has lingered in the background throughout the growing season," AgResource said, adding that price increases will hardly happen "without a major threat to yield in August or during harvest."
AHEAD
--The EIA releases its weekly update on ethanol production and inventories at 10:30 a.m. ET Wednesday.
--The USDA releases its monthly cold storage report at 3 p.m. ET Wednesday.
--The USDA will release its latest weekly export sales numbers at 8:30 a.m. ET Thursday.
--The USDA releases its monthly cattle on feed report at 3 p.m. ET Friday.
--The CFTC releases its weekly commitment of traders report at 3:30 p.m. ET Friday.
